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Ontario Leads a Nation Ripe for Growth

Photo: Getty Images

by ADAM BRUNS

Toronto-based TransPod in July announced that building a TransPod hyperloop system would cost half the projected cost of the high-speed rail (HSR) system already proposed for the Toronto-Windsor corridor, and would move at more than four times the HSR’s top speed. The firm’s design is shown here speeding across the Alberta countryside.

Rendering courtesy of TransPod

Not long ago, David MacNaughton, Canada’s ambassador to the United States, was in a taxi in Toronto and running late for a speaking engagement before a group of venture capitalists.

“I thought I knew you,” his Afghani driver, who has been in Canada for two years, told the ambassador. “That point you made on TV the other day about US jobs being dependent on trade with Canada was a good one.”

That anecdote, relayed during MacNaughton’s conversation with Site Selection this past spring, captures a number of trends: The country’s openness to immigrants, the engagement and education level of those immigrants, the continuing importance of massive Canada-US trade, heightened interest in Canada from those venture capitalists … and yes, the fact that Toronto traffic might make you late to an appointment. (Should have taken the new UP Express train downtown from the airport, Mr. Ambassador.)

‘The Human Resource’

The traffic, however, reflects a booming metro area of nearly 6 million in a continuously pioneering province, as Ontario once again earns Site Selection’s nod as the most competitive province in Canada. Greater Toronto and two of its leading municipalities, meanwhile, make our Canada’s Best Locations and honorable mention lists, recognizing the nation’s leading economic development groups when it comes to corporate facility investment and the programs to support it.

Ambassador MacNaughton observes that investors are getting past the long-held perception that Canada is all about “rocks and logs and oil and gas.”

“I’ve been around the US quite a bit in the last year, and what I hear about more than anything else is a new kind of resource — our human resource,” he says. “We have a very well educated talent pool, good universities, and we’re recruiting the best and brightest people from around the world. In today’s transformation of business through technology, people say, ‘You have some pretty smart people there, and it’s a good place to invest.’ ”

More People, More Trade

Getting more people there is a major goal of the nation, as its population of 35 million ages. The federal government has set a target of 300,000 immigrants, though MacNaughton says an economic development panel already has suggested moving that target to 400,000. Nearly as he spoke, one new element of the strategy was opening for business: The global skills visa program, a $7.8-million, two-year effort, aims to process international talent recruitment applications by high-growth companies in two weeks rather than the year it currently takes, for a $1,000-per-position fee. A separate Startup Visa program — which allows entrepreneurs to become permanent residents in Canada if a Canadian venture capital fund or angel investor group makes a financial commitment — is going from pilot stage to part of the country’s immigration policy starting in 2018.

Canada’s GDP grew at a 3.7-per-cent pace in the first three months of 2017, more than tripling the 1.2-percent pace in the US.

Renegotiation of the 24-year-old NAFTA agreement also is looming. MacNaughton says Canadian and US leaders agree on one thing right off the bat: First do no harm.

“Look at the integrated supply chains, and the number of jobs dependent on free trade [among] our three countries,” he says. “Ninety percent of the trade between us goes on without a hiccup. Little things are irritants, and we need to not negotiate those in public. We need to figure out how to sort those out and expand trade, not curtail it. But we should make sure we do not do harm inadvertently. The economy has changed so much in the last 10 to 15 years. Not a lot of people understand how linked we are.”

The real opportunity, he says, “is to figure out how North American companies can become more globally competitive” and take on the world. Provincial leaders in the meantime are not sitting idle waiting for their NAFTA partners: At the 2017 Summer Meeting of Canada’s Premiers, they officially welcomed Prime Minister Justin Trudeau’s commitment to explore a potential free trade agreement with China.

Canada’s Best Locations: Why People and Companies Are Looking North

Though investors have grown fond of the traditional cluster strengths in such major metros as Vancouver, Toronto, Montréal and Calgary, savvy investors are looking to smaller cities and towns, Ambassador MacNaughton observes, where the university connections are strong, and so are clusters: cybersecurity in Fredericton, artificial intelligence in Winnipeg, financial services as well as historical Boston-area institutional linkages in Halifax. “People are finding that there are pockets across the country where surprising things are happening,” he says.

Among Ontario's economic strengths are food & beverage and a bigger-than-you-think agriculture sector stretching from the fertile Niagara region to Leamington, where NatureFresh Farms, a producer of non-GMO produce (pictured), is based.

It’s no accident that when The Economist released its annual rankings of the globe’s most livable cities, three of the top five were in Canada. Based on indicators of global metro areas’ stability, health care, culture/environment, education and infrastructure, Vancouver is No. 3 in the world, Toronto is No. 4 and Calgary is No. 5.

It’s likewise no accident that the economic development organizations affiliated with all three of those cities appear among our Top 10 groups in this year’s edition of Canada’s Best Locations. Many of the same aspects that go into making a place livable also make it investable, judging by the project numbers tracked by Site Selection’s Conway Projects Database and by the proactive programs these regions pursue.

2017 Canadian Competitiveness Rankings

1. Ontario Investment Office

“With this commitment and the support from key strategic partners, we have established a strong future for the highly-skilled and talented employees across Canadian operations.”
— Joe Hinrichs, President of The Americas, Ford Motor Company, March 2017, on Ford’s C$500-million R&D investment across North America, including sites in Ottawa, Oakville and Windsor

Programs & Initiatives:
Prime Minister Justin Trudeau, Ontario Premier Kathleen Wynne, and Toronto Mayor John Tory were among the leaders on hand recently to announce joint funding of C$1.25 billion for Waterfront Toronto to design and build the Port Lands Flood Protection and Enabling Infrastructure Project. Starting in 2016/17 the province increased funding for the Interactive Digital Media Fund to $10 million annually.

Did You Know?
Ontario is making the largest infrastructure investment in hospitals, schools, public transit, roads and bridges in the province’s history, including $21.3 billion to transform the GO network from a commuter transit system to a regional rapid transit system.

2. Alberta Ministry of Economic Development and Trade

“Spanning from Hardisty, Alberta to Gretna, Manitoba, the $5.3-billion Canadian portion of the L3RP enhances safety, creates thousands of jobs, generates hundreds of millions of dollars in tax revenue, and contributes billions to the GDP of Canada via direct, indirect, and induced benefits.”
— Official statement in August 2017 by Enbridge about its Line 3 Replacement Program

Programs & Initiatives:
Alberta’s small business corporate income tax rate fell to two percent in 2017, and the small business income threshold is $500,000. The provincial government has invested $100 million to attract more venture capital to Alberta to grow early-stage technology companies. The addition of new business incubation and development space makes Alberta’s Food Processing Development Centre and Agrivalue Processing Business Incubator the largest of its kind in the world.

Did You Know?
Alberta’s 4.3 million people are the youngest of all Canadian provinces, with a median age of 36.3 years. Between 2006 and 2016, Alberta accounted for 22 per cent of Canada’s population growth.

3. Invest Québec

“In addition to finding the right place for our needs, we were especially sensitive to our employees’ quality of life. The natural ‘outdoors’ feeling of the city, combined with the proximity of the bicycle path and the future arrival of the REM [Metropolitan Electric Network] motivated and confirmed our decision.”
— Zodiac Aerospace Operations Vice President Michel Bussey on the aircraft interiors company’s $5-million, 400-job investment in a new location at suburban Ste. Anne de Bellevue’s industrial park

Significant Projects:
ArcelorMittal, GE Aviation, Raufoss Canada

Programs & Initiatives:
The basic combined federal and provincial business income tax rate in Quebec is 26.8 percent, third lowest in Canada after BC (26 percent) and Ontario (26.5). Quebec’s portion of the basic rate will decrease gradually from 11.8 percent to 11.5 percent in 2020 and subsequent years, bringing the province in line with its Ontario neighbor. Invest Quebec’s role as a financing corporation enables it to offer refundable tax credits for the production of multimedia titles and investment in IT-related firms’ growth, among others.

Did You Know? Quebec claimed a population of 8.3 million in 2016. Among the 49,000 immigrants in 2015, the highest percentage were from Asia, followed by Africa, together comprising more than two-thirds of all landed immigrants.

Canada’s Best Locations

(alphabetical order by metro area)

Calgary Economic Development

“We’re pleased the government sees the value of having the brain trust of the NEB in Calgary and being part of the innovation ecosystem here, bringing all of the key players together to take on our challenges in energy and environment.”
— Mary Moran, President & CEO, Calgary Economic Development, July 2017, on the reversal of an earlier federal government recommendation to move important parts of the National Energy Board to Ottawa

Programs & Initiatives:
Calgary’s city council in June 2017 approved an initiative that will provide $10 million to create the Calgary Economic Development Investment Fund, to be used to support efforts to attract new companies, leverage municipal funds for additional investments into the community, and create employment lands and stimulate job creation. The council also approved a three-year pilot project that amended the land-use bylaws to waive permit requirements, shorten timelines and reduces costs for both building owners and businesses planning to redevelop buildings in the Downtown Core, Downtown West and Beltline.

Did You Know?
For the first time since 2013 — the height of the oil sands boom — a majority (60 percent) of the business leaders surveyed for The Calgary Chamber and Calgary Economic Development said in April they expect their business and the area economy to improve in the year ahead.

City of Mississauga Economic Development Office

“This purpose-built 280,000-square-foot distribution facility will allow us to deliver parts faster than our previous service offer. The faster delivery of parts means less time away from your car and a more satisfied ownership experience — all top priorities for us.”
— Hans Blesse, President and CEO, BMW Group Canada, on the company’s new 50-job regional distribution center in Mississauga, a relocation and expansion from Whitby

Significant Projects:
Fresenius, Solera, Santa Cruz Biotechnology

Programs & Initiatives:
In June 2017, Walter Garrison was introduced as the office’s new Advanced Manufacturing Business Integrator, working with the area’s aerospace, automotive, food and beverage, and clean technology sectors.

Did You Know?
More than 88,653 businesses in Mississauga employ over 428,309 people.

Montréal International

“Montréal stands out due to its strategic location, economic stability, competitive cost of living and safe urban environment. What’s more, Montréal is home to a large and vibrant student community. The city’s got everything we need to fulfill our mission.”
— Niels Caszo, President of AIESEC International 2016-17, on the global youth organization’s selection of the city as the home of its international secretariat, July 2017

Programs & Initiatives:
In February 2017, Montréal International in partnership with the Communauté métropolitaine de Montréal, the Chamber of Commerce of Metropolitan Montréal and CargoM launched ZOOM Greater Montréal, a web portal where users can search for office space and industrial or commercial properties for rent or for sale.

Did You Know?
Canada may have celebrated its 150th birthday this year, but it’s just a toddler compared to Montréal, which on May 17, 2017, celebrated the 375th anniversary of its founding in 1642 as Ville-Marie. Among the signs of more recent change: The percentage of Montrealers whose mother tongue was neither French nor English grew from 10.3 percent in 1941 to 32.6 percent as recently as 2011.

Invest Ottawa

“I have co-founded startups in Paris and San Francisco, but have never experienced the level of support by both the institutions and individuals, as I have experienced in Ottawa.”
— Solon Angel, Chief Strategy Officer and Founder, MindBridge.ai

Programs & Initiatives:
“Work in Ottawa,” the talent attraction campaign launched in March 2017 by Invest Ottawa, aims to work with national initiatives such as Go North Canada to attract tech talent to work at the region’s 1,700 tech firms.

Did You Know?
Expert Market in March identified Ottawa as the top tech hub in which to live and work in Canada.

Québec International

“Everybody felt the same way — that a [US Customs] preclearance center was vital to tourism and economic development in the region and in all of eastern and northern Québec.”
— Aéroport de Québec inc. (AQi) President and CEO Gaëtan Gagné, March 2017

Programs & Initiatives:
Calgary-based WestJet Airlines announced in February it would add 50 new flights from Quebec City by October 2017. Québec City Jean Lesage International Airport (Aéroport de Québec inc. or AQi) is investing $277 million into site expansion and airport development in order to serve an anticipated 2 million passengers a year by 2020.

Did You Know?
Despite concerns over labor shortages, among the 225 CEOs in the region who responded to Quebec International’s annual business confidence survey, 74 percent plan to invest in their companies in 2017, with nearly 55 percent (up 9 percent) planning to invest in R&D.

Saskatoon Regional Economic Development Authority

“Hodgins Family Farms works with ILTA Grain to export pulses to the global market and is looking forward to delivering to the newest, most efficient plant in western Canada located on the CN mainline rail at Saskatoon.”
— CN, June 2016, on ILTA’s new grain handling center

Programs & Initiatives:
In 2016, SREDA partnered with Idea’s Inc. to develop a launch pad program for startups. The organization also launched a new event, the STIC Awards, to recognize the region’s science and technology cluster leaders. SREDA’s 2016 Economic Impact was estimated to be $48.5 million, along with a Return on Investment (ROI) of 25 to 1.

Did You Know?
Data released in early 2017 showed that between 2011 and 2016, the Saskatoon metro area’s population growth rate of 12.5 percent was the third-highest in Canada, after fellow western Canada cities Calgary (14.6 percent) and Edmonton (13.9 percent).

Toronto Global

“It will also reinforce Toronto’s position as a global financial capital and is an investment in this city as a place to work, live and explore.”
— Kevin Patterson, Senior Executive Vice President, Technology & Operations, CIBC, on the firm’s new HQ and campus

Programs & Initiatives:
Launched in February 2017, Toronto Global leverages the strengths of the Federal Economic Development Agency for Southern Ontario, the Ontario Ministry of Economic Development and Growth, and the municipalities of Toronto, Mississauga, Brampton, Halton, York and Durham. Toronto will receive $4.8 billion in federal public transit funding, with Ontario called on to match one-third of the costs.

Did You Know?
Having grown by 6.2 percent since 2011 to 5.9 million people, Greater Toronto now generates 20 percent of the country’s GDP and hosts 40 percent of Canada’s business headquarters. Toronto has the most female entrepreneur-focused culture in the world, according to a study by the Dell Women Entrepreneur Cities Index, which ranked the region ninth overall.

Vancouver Economic Commission

“With attributes like a talented and culturally diverse workforce, tech-sector anchor firms, and welcoming policies on investment and immigration, Vancouver and the Cascadia Corridor continue to grow as a North American tech hub.”
— Greg D’Avignon, Board Chair of HQ Vancouver, on the July 2017 opening of Canadian head offices by Tokyo-based Classmethod and San Francisco-based CoMedia Design Inc.

Programs & Initiatives:
As part of San Diego Mayor Kevin Faulconer’s trade mission to Vancouver, Foresight Cleantech Accelerator Centre, Western Canada’s first cleantech accelerator, and Cleantech San Diego in June announced a partnership exchange for cleantech companies, supported by their regional economic development counterparts. In October 2016, the City of Vancouver and the VEC announced the city’s first film commissioner and the creation of a new Film & Media Centre, mandated to raise the profile of Vancouver on the global stage.

Did You Know?
Known as the third-greenest city in the world, Vancouver aims to reach No. 1 through its Greenest City Action Plan.

Waterloo Economic Development Corporation

“Waterloo’s strong ties to industry help drive innovation and fuel our economy.”
— Feridun Hamdullahpur, President and Vice-Chancellor, University of Waterloo, on the June 2017 receipt of federal funding support

Significant Projects:
Iron Mountain, Ampacet Canada, Hahn Plastics

Programs & Initiatives:
World-leading institutions based in Waterloo include the Institute for Quantum Computing, the Perimeter Institute, the Centre for International Governance Innovation, the Accelerator Centre at the University of Waterloo and the industry-led innovation center Communitech.

Did You Know?
The 2017 QS Graduate Employability rankings rated the University of Waterloo, home to 36,000 students, No. 1 in employer partnerships.

Windsor-Essex Economic Development

“As a trading nation, Canada recognizes the strong connection between trade and good, well-paying jobs. We are proud to designate the Windsor–Essex region as the second FTZ Point in Ontario. We are committed to strengthening this region and all of southern Ontario as an international hub with world market accessibility.”
— The Hon. Navdeep Bains, Minister of Innovation, Science and Economic Development and Minister responsible for FedDev Ontario, July 2017

Programs & Initiatives:
Among the unique assets in WEEDC’s portfolio is the one-of-a-kind Institute for Border Security and Logistics (IBLS), which assists entrepreneurs and SMEs. Top priorities of the group on behalf of its stakeholders during the second quarter of 2017 included NAFTA, business immigration, cap & trade, energy costs, and the demand and challenges for skilled trades and labor.

Did You Know?
More than 2,000 acres of greenhouse operations make Windsor-Essex the largest vegetable greenhouse cluster in North America.

London Economic Development Corporation (Ontario)

Niagara Economic Development

Economic Development Winnipeg

Adam BrunsManaging Editor of Site Selection magazine

Adam Bruns has served as managing editor of Site Selection magazine since February 2002. In the course of reporting hundreds of stories for Site Selection, Adam has visited companies and communities around the globe. A St. Louis native who grew up in the Kansas City suburbs, Adam is a 1986 alumnus of Knox College, and resided in Chicago; Midcoast Maine; Savannah, Georgia; and Lexington, Kentucky, before settling in the Greater Atlanta community of Peachtree Corners, where he lives with his wife and daughter.